alizz islamic bank went live with Oracle FLEXCUBE as its core banking platform in just five months; Acting CEO Jamal Darwiche takes Robin Amlôt through the implementation process

One of Oman's first dedicated Shari'ah-compliant financial institutions, alizz islamic bank, implemented Oracle FLEXCUBE Mobile Banking, Oracle FLEXCUBE Direct Banking and Oracle FLEXCUBE Universal Banking in just five months. "FLEXCUBE offers versatile business functionality for banks," said Chet Kamat, CEO and Managing Director, Oracle Financial Services Software. "Our pre-configured Islamic banking capability combined with a proven implementation track record enables our customers to achieve their business outcomes while effectively managing risk." Oracle FLEXCUBE offers a dynamic solution that will enable the bank to provide innovative corporate and retail banking services and products that support Shari'ah-compliance, as well as highly personalised customer service.

The platform includes a corporate website, online banking, mobile banking app, short message service and ATM & branch banking. The full core and internet banking solution went live in just five months.

LEVELLING THE PLAYING FIELD

Jamal Darwiche of alizz islamic bank explains the selection process, "We had consultants helping us, it was not just a management decision. PwC was tasked by the board to help select a core banking system.

"We wanted to make sure that we would be able to compete with conventional banks so the first thing we looked at was the customer experience. We wanted to come up with something that even though we required Shari'ah-compliant product settings, at the same time, we needed something that would give us an advantage, an edge against existing conventional banks to compete on customer acquisition and customer satisfaction."

alizz islamic bank took a close look at the competition, including thorough site visits. This analysis allowed the bank to see the limitations of some of the competing systems already in place, noting issues on the integration of features such as mobile banking and
internet banking.

"Customer experience, quality of technology and, of course, the ability to create products that adhere to Shari'ah were the main components we looked at," said Darwiche.

The bank was clear from the start that it had to be competitive not just with other Islamic product offerings but also the conventional banking sector in Oman.

"The total credit of Omani banks divided by GDP is one of the lowest in the GCC. It's hovering around 70-72 per cent so there is a lot of room for banks to grow but we need to compete with conventional banks. We know there is a 'hardcore' audience that if offered the choice between conventional banking and Islamic banking, would choose the Islamic bank. But the majority of people are going to be asking other questions like, 'How fast is your service?' 'How do I do the transactions I want?' 'Can I do standing orders?' This is about customer service, not about Islamic banking structures.

"In the long term, to compete, we have to look at technology; we cannot be short-sighted. We do think that the economic conditions in Oman will support the growth of additional banks, specifically Islamic banks, if they have the technology and the products to compete with conventional banks."

MAKING THE RIGHT CHOICE

In choosing its core banking platform, alizz islamic bank considered a range of product providers and called in several to present to the bank, "We gave them real scenarios to run in front of us on their systems. We had massive sessions of 3-4 days with each one and scored them technically on their ability to meet our requirements from a product point of view and a Shari'ah point of view," said Darwiche.

"We looked at the technology, its ability to integrate with payment systems, with channels, with SWIFT, with MasterCard and Visa, etc. We also looked at the ability to provide multiple parts of the IT infrastructure.

"It was pretty clear early on that Oracle was way ahead in the initial evaluation - Oracle had the hardware, the database, the core banking system, the channels - and was very interested in getting into Oman where the company didn't yet have a client. Oracle also told us they would not outsource the implementation to a partner, they would do it themselves, others had said, 'We would like to work with this company and that company to implement...'

"Our final step, after we had shortlisted the last two candidates, we visited Dubai Islamic Bank and RAKBANK [which had just implemented a version of FLEXCUBE]. The feedback we got on these site visits was really positive."

QUALITY AND FLEXIBILITY

As an alumnus of the likes of Wells Fargo, HSBC and Providian before its acquisition by Washington Mutual, Jamal Darwiche has experienced a number of platform implementations. "This is one of the best. Even Oracle was astonished at the speed of such a complex implementation!" Indeed Darwiche noted a recent visit to the bank by Kishore Kapoor, Group Vice President and Global Head of Product Consulting at Oracle Financial Services Software, who remarked on the quality and flexibility of the implementation. alizz employed an independent team to test the system with 25 people in Oman and 25 in India logging in remotely.

The bank went live on 1 October 2013. "We have been operational now for more than three months... the system is running and I can't recall it being down at any time. The products are working, every product we coded in during testing, whether Murabaha, ijarah, forward Ijarah on the asset side, and Mudaraba or Wakala on the liability side."

Oracle FLEXCUBE also offers alizz islamic bank the flexibility to expand its product offering. The limiting factor, said Darwiche, is the regulatory framework. "There are some restrictions in terms of the products we can offer, for example commodity Murabaha is not allowed. Can Oracle do these things if the regulations allow them? Yes; in terms of technology we haven't reached a point where Oracle has said, 'This can't be done.'"

FOCUSSING ON THE CUSTOMER

Of the customer service functionality offered by Oracle FLEXCUBE, Darwiche remarked, "We have things here that nobody can do! We do instant debit card, you get your card embossed. You can activate your account by phone, you get an instant printed cheque book, you can go online, self-register and then use Oracle FLEXCUBE online banking... if you're a fan of Android or Apple, you can go to the app store and download the app and start mobile banking using the same password and user name you set up for online banking.

"It's an instant experience that I haven't seen before... and this is what we are promoting - the customer experience - and we are saying, by the way, we are Islamic."

The bank's other partners include NCR Corporation for transaction technologies and Genesys for call centre management, with both systems integrated with the Oracle platform. "We were careful not to have too many partners. In the implementation we knew what we wanted and we didn't change our mind. We had a very clear project management office holding everybody responsible. Working with a small number of vendors helped speed the process... it could have taken years. Some banks in the region have taken up to 22 months to roll out just liability products, we did it in five!"

STAKING A CLAIM TO THE FUTURE

Looking to the future, Darwiche said, "Our focus is going to be on corporate banking but we have a very impressive retail model that does not require a lot of bricks and expenses to expand. In our feasibility study we said we should be capturing 20-25 per cent of the Islamic banks' share of assets and overall in Oman that we should have 3.5 per cent of the entire banking market, conventional and Islamic. We are sticking to those assumptions.

"From a technology point of view, we would like to push ahead as much as we can when it comes to technology. We don't see that being an Islamic banking provider of finance has anything to do with not embracing technology. We see ourselves as a progressive bank and we will look at whatever technology comes our way, for example cardless transactions, NFC, notepad banking, etc.

"One of the advantages of being a new bank is our IT infrastructure is in the cloud. We don't have our servers here, we don't have our storage here; it is all in the cloud. The bank is focussed on product and delivery; we let someone else focus on the servers, the uptime, the bandwith and the connectivity."

Jamal Darwiche concludes, "Oracle FLEXCUBE helped to enable us to immediately achieve the results we desired, while also providing us with a modern, integrated banking platform that will support future growth. A project of such complexity was executed in a record breaking timeframe of under five months by the joint team. We are proud of what we have achieved."

alizz islamic bank SAOG

alizz islamic bank is one of the first dedicated Islamic banks in Oman and was named 'Most Innovative Islamic Bank in Oman' in 2013. Founded in 2012 in accordance to Royal Decree No. 69/2012, the Bank's total paid up capital is OMR 100 million of which 40 per cent was raised by public investors during the Initial Public Offering (IPO) in September 2012. alizz islamic bank is promoted by Huriah Company LLC, aabar Investments PJS, First Energy Oman and Tasameem Real Estate Company LLC.

© Banker Middle East 2014